3. Assume that a firm uses only one variable input. If a firm is experiencing diminishing returns, which of the following is true as more of the variable input is used? Marginal cost will decrease at a constant rate. Marginal cost will decrease at a diminishing rate. Marginal cost will increase. Marginal product will increase at a constant rate. Marginal product will increase at a diminishing rate.
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In the context of a firm using only one variable input, diminishing returns occur when adding an additional unit of the variable input results in less and less additional output. Now, let's look at the options: Show more…
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